President Clinton recently confessed he had to ''fudge'' on legislation authorizing reprisals against allies who do not cooperate with U.S. sanctions. This was precisely the aim of the agreement negotiated last month by the State Department and the European Union.

On Iran, the United States agreed to waive sanctions in exchange for a general European commitment to strengthen controls on technology exports. On Cuba, the EU agreed to discourage investment in confiscated property in Cuba if Congress removes the provision of the Helms-Burton Act denying visas to executives whose firms invest in disputed properties, something it is unlikely to do.The specifics are less important than the underlying strategy: dual containment. Only the targets are not Iran and Iraq, but Congress and the Europeans. Congress is offered just enough to hold off pressures for mandatory reprisals. The Europeans are mollified and withdraw a potentially damaging grievance from the World Trade Organization.

Call it the foreign policy version of ''triangulation.''

This practice has a long pedigree. In the 1950s, Congress passed the Battle Act, which instructed the executive branch to cut off aid to allies that exported what the United States defined as a ''strategic good'' to communist adversaries.

Neither the Truman nor the Eisenhower administrations wanted to invoke sanctions because of the costs to alliance cohesion and European recovery. Their solution was to fudge - obtaining non-binding pledges from allies as cover to waive the sanctions. The only time the Battle Act was invoked was in 1956 against Ceylon for the sale of rubber to China, and Ceylon was not even a recipient of U.S. aid - making it the ideal candidate for a symbolic demonstration of resolve.

European-American differences over sanctions have their origins in the Cold War. After World War II, the United States became both the champion of free trade and the most prominent practitioner of peacetime economic sanctions.

The Europeans, by contrast, were only willing to embargo items of direct military significance and encouraged nonstrategic trade. In part, the allies were motivated by commercial considerations and the opportunities created by the absence of American competitors. They also questioned the utility of sanctions as a means of changing Soviet behavior or weakening the regime.

These differences have not been bridged by the end of the Cold War. If anything, the United States has used sanctions more extensively in the 1990s than ever before.

In part, this is due to a broadened foreign policy agenda (nonproliferation, human rights, terrorism) in which everything is no longer subordinated to the Cold War. It is also the result of an increasingly activist Congress that has imposed new sanctions on issues ranging from nuclear testing to religious persecution.

The Europeans are no less skeptical of this new sanctions agenda. They have been willing to follow the U.S. lead when there is a clear and present danger, such as Iraq's invasion of Kuwait. And as with Cold War sanctions, Europe controlled the export of nuclear and missile-related technology (Washington was able to intercede with Bonn to abort a nuclear deal between Iran and Siemens). Beyond that, European governments have questioned the strategy underlying most U.S. sanctions.

On both Cuba and Iran, they see engagement, not sanctions, as the best means to promote moderation. As a result, they see no reason to forgo economic opportunities in either country. U.S. efforts to interfere with this business through extraterritorial sanctions is condemned as a violation of their sovereign right to conduct their own foreign economic policy.

How then should the United States respond to its allies' policies? One approach, adopted by the Congress, is to apply sanctions to foreign governments and companies.

Defenders of this strategy point to the role of Cold War sanctions in bringing down the Soviet Union. This is a misreading of the history of East-West trade. Yes, the denial of high-technology goods limited Soviet capabilities. Such efforts, however, were successful only when U.S. firms were the technologically dominant producers or when Washington persuaded (and sometimes pressured) the allies to broaden the consensus in areas of agreement (strategic controls over high-technology goods).

When the United States unilaterally embargoed items readily available from allies, sanctions led to changes in trading partners, not costs on adversaries. And when the United States coerced compliance through extraterritorial sanctions - as in the pipeline case - it impaired cooperation in areas of potential agreement.

If the administration were to pull out the stops and apply comparable pressures to allied trade with Cuba, Libya and Iran, it could lead to defections from multilateral controls and sanctions already agreed to, not the least of which is the embargo against Iraq. In a world where the United States cannot impose its will on others, fudging can have its virtues.

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